The business model for this investment is to collect contractwalcosh floWs ond sell empany purchased P5,000,000 8%, 5-yearbonds on January 1,2020Wn interest payable on June 30 and Decermber 31. me bonds w ere purchosed for P5.208.o00 at on effective interest rate of 776. the bonds in the openmarket. On December 31,2020, the bonds were quoted at 106. 1. Whot omount of interest incomeshould be reported for 20207 0.400,000 b. 200,000 C. 364,560 d. 363,940 5,000,000 X8% 2. What ormount should be recognized in OClin the stoterment of comprehensive income for 20202 a. 300,000 b. 125,440 C. 128,060 d. 92,000 3. f the enttty elected the folrvotue option, what total amount of incomneshoulc be recognized for 20202 a. 400,000 b. 492,000 C. 208,000 d. 300,000
The business model for this investment is to collect contractwalcosh floWs ond sell empany purchased P5,000,000 8%, 5-yearbonds on January 1,2020Wn interest payable on June 30 and Decermber 31. me bonds w ere purchosed for P5.208.o00 at on effective interest rate of 776. the bonds in the openmarket. On December 31,2020, the bonds were quoted at 106. 1. Whot omount of interest incomeshould be reported for 20207 0.400,000 b. 200,000 C. 364,560 d. 363,940 5,000,000 X8% 2. What ormount should be recognized in OClin the stoterment of comprehensive income for 20202 a. 300,000 b. 125,440 C. 128,060 d. 92,000 3. f the enttty elected the folrvotue option, what total amount of incomneshoulc be recognized for 20202 a. 400,000 b. 492,000 C. 208,000 d. 300,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
LOVE
Transcribed Image Text:LOVE Company purchased P5,000,000 8%, 5-year bonds on January 1,2020 with
interest payable on June 30 and December 31.
e Donds were purchosed for P5.203.000 ot on effective interest rate of 7%.
e business model for this investment is to collect contractualcosh flows cnd se
the bonds in the openmorket.
On December 31,2020, the bonds were quoted at 106.
1. Whot omount of interest incomeshould be reported for 20207
Q. 400,000
b. 200,000
C. 364,660
d. 363,940
S,000,000 X8%
2. What amount should be recognized in OCl in the statement of
comprehensive income for 20202
a. 300,000
b. 125,440
C. 128,060
d. 92,000
3. f the entity elected the foirvotue option, what totol amount of incomeshould
be recognized for 20209
0. 400,000
b. 492000
C. 208,000
d. 300,000
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